With deposits outpacing appetite, exports & tariffs hold key to credit revival

India’s bank loan growth dropped to 9.4% as of June 27, its lowest since March 2022, while deposit growth rose to 10%, outpacing credit demand. Despite rate cuts and easing liquidity, credit growth slowed due to weak investment demand. Economists suggest structural reforms in tariffs, trade, FDI, and ease of business are needed to revive loan demand and boost exports.